Hong Kong developer Wheelock Properties has sparked fears of a faster-than-expected correction in the world’s most expensive property market by pricing a new project in Tseung Kwan O 8 per cent below properties sold in the area just two months ago.

It has priced a first batch of 130 flats at the 674-unit Marini development, in Lohas Park, at an average of HK$14,997 (US$1,912.9) per square foot, after a 21.5 per cent discount.

“The social unrest in the past two months has had a significant impact on the property market. It is a happy price [for Marini],” Stewart Leung, the Wheelock chairman, said on Thursday. He said the price was about 7 per cent to 8 per cent below that of units sold at the last batch of Wheelock’s Montara and Grand Montara developments, which sold out in a short period.

“Undoubtedly, developers will offer units at low prices at a time of poor market sentiment, which will stir up competition for buyers,” said Vincent Cheung, managing director of Vincom Consulting and Appraisal. He said he expected home prices will drop as much as 5 per cent from now until the end of the year.

This month, Billion Development and Project Management was the first developer to offer new projects at steep discounts. It marketed a first batch of 354 units at the soon-to-be completed The Aurora development in Tsuen Wan at HK$17,740 per square foot, about 10 per cent lower than the prevailing rate in the district. After all 354 units were sold on the first day of sales, it has raised prices for the second batch of 216 units – to go on sale this Saturday – to HK$19,052 per square foot.

To attract buyers, Wheelock has priced Marini, due to be completed in 2020, at 21 per cent lower than the latest batch of The Aurora flats.

Alvin Cheung, associate director at Prudential Brokerage, said more developers cutting prices would quicken a downward adjustment in the market.

“Uncertainty is the biggest threat to the property market. We have seen unemployment is edging up, and hotels have asked their staff to take unpaid leave as fewer tourists arrive. Savvy developers know the economy will stay weak and have indicated their eagerness to sell fast, before market sentiment turns from bad to worse,” he said.

On Monday, the Census and Statistics Department said Hong Kong’s unemployment rate had increased to 2.9 per cent in the three months to July, from 2.8 per cent in the previous period, the highest jobless rate since the three months to March period in 2018.

Home prices might decline by 10 per cent through March 2020, Morgan Stanley said this week, joining DBS in forecasting a plunge in prices of between 20 per cent and 30 per cent next year, in the worst of three scenarios.